Foreign Affairs Committee on Oct. 26th, 2016

[John Boscariol]

It's John here, and I'll take a very quick crack at that.

You may recall the situation of a Mr. Abdelrazik, who was a Canadian stuck in Sudan and was unable to return to Canada because he was on a UN list. The UN can screw these things up sometimes. Sometimes people are on lists who shouldn't be on them. You'll recall in that case our Federal Court scolded the Canadian government at the time for not allowing him to come back to Canada, although eventually he did come back to Canada.

I can tell you from my experience in representing companies on Canada's lists that the process for getting them off when you know there's been an error is very difficult. You have no insight, no transparency into that. There's no due process. Understand, for companies as well as individuals, when you put them on a list, even if they may not be able to come to Canada, or the companies may not be able to do business with Canadians, the impact is worldwide as soon as you put someone on that list. Banks around the world search the Canadian list; their databases include U.S., Canadian, Australian, and EU lists. There is a huge impact when you put someone on that list. So I think if we're going to expand the number of people on these lists in Canada, we need to have a better mechanism in place to protect people against wrongful designations.

[The Chair, Liberal, Bob Nault]

Thank you.

Go ahead, Thomas.

[Dr. Thomas Biersteker]

I agree very much with Mr. Boscariol's points about the importance of having procedures available. If there are mistakes made, there need to be procedures available for the presentation of information. The biggest problem historically has been that most of the designations, in sheer numbers, have been related to counterterrorism. The information that serves as the basis for these statements of case tend to be from classified sources, and this is why it's difficult to have a fair, full hearing in the aftermath.

I do think it's important to have procedures in place, and rigorous procedures too. Something the United Nations did under Resolution 1822 in 2008 was it simply went through all of those lists to make sure that they had adequate information, that they still agreed that the designated individuals should remain designated. The size of the list is less important than the quality of the list.

In different countries there are different ways in which these lists are constructed. In the United States, the list is constructed through a fairly elaborate inter-agency procedure where representatives from a number of different federal departments determine the basis of designation. This procedure includes the justice department as well as others, so it's not the product of a single agency or a single department of government. It's an inter-agency decision.

With regard to the UN, it's a political decision, and technically it's argued to be a preventive measure. People are put there on the basis of reasonable information in the spirit of trying to prevent certain actions from taking place.

On Professor Lilly's points, I'm not conversant with the details of Canadian legislation, so I'm not in a position to say whether or not the means are available. In respect of concerns about gross violations of human rights, I think it's important for any sovereign state to have the capacity to make a determination and exercise its policy in that area. I agree with her, however, that it's very difficult, and I think her previous comments about establishing benchmarks and having procedures is something that would be important to introduce.

I have a slight disagreement with something she said in her opening statement, although it may just be a matter of interpretation. As to UN sanctions, the United Nations invokes human rights in every resolution, but rarely are human rights violations the principal reason for UN action. This is is mainly due, I think, to technicalities in the UN charter. For example, the sanctions on South Sudan are motivated by concerns about potential genocide and concerns about the result being framed not in human rights but in armed conflict. They would attempt to obtain a ceasefire, negotiate a settlement, get implementation of that settlement, and ultimately resolve it.

So although the UN has in theory used the doctrine of the responsibility to protect, interestingly it's only been used in one case, in two episodes, and that was in Libya in 2011.

[The Chair, Liberal, Bob Nault]

Thank you, Mr. Biersteker. Thank you, Mr. Miller.

For the benefit of the committee, are the witnesses aware of any analysis that has been done when these individual or economic sanctions are put on vis-à-vis the economic effects on our own industry and our own companies in Canada? Of course, if the discussion here this afternoon is to expand into gross human rights activities, that would probably include a number of potential economic sanctions on further countries and have more impact on the small and medium-sized businesses, and obviously our larger corporations.

I'd be interested in hearing from you an analysis of whether that exists, whether we are doing that now in Canada, and whether there are studies available as it relates to not just the message we are sending, but the effects we are having on our own corporations.

I'll just leave that with you; I'm not looking for an answer right now, but I think it's something we will have to tackle at some point as we look at how we want this legislation to read. Of course, there are private members' bills in the Senate and the House of Commons that sort of reflect this argument of expanding our reach, so I would be very interested in knowing what your views are on that at some point.

Thank you for that, Mr. Miller.

I'll go to Mr. Kent.

[Peter Kent, Conservative, Thornhill, ON]

Thank you to all the witnesses for reminding the committee, and more important, the Canadians who are following these hearings, just how many definitions there are of sanctions and the intent of the different sorts of sanctions, whether it is to penalize, to shame, to persuade, to restrict, or, as has been referenced here, to send powerful signals. I regret that I'm old enough to remember the first UN sanctions, imposed against Rhodesia in 1966—90% sanctions, trying to force the country to comply with UN direction, which were largely unsuccessful because they were flagrantly breached by South Africa.

I'd like to come back, today, to the Magnitsky Act as it was passed in the United States, recognizing that in Canada both SEMA and the Freezing Assets of Corrupt Foreign Officials Act have sort of responded to issues of the day and been updated as conditions and challenges arise in different ways.

As I read it, the Magnitsky Act is certainly effective in sending a signal and shaming the particular country in question, but its ultimate purpose, as designed, is to ostracize or isolate corrupt criminal individuals and their wealth and basically bar them from removing themselves, their families, and their ill-gotten gains to the United States. As the Canadian Parliament passed a motion last year, it would do the same in Canada.

I'm just wondering—for Dr. Lilly first, but our other witnesses as well.... I think the patron of the Magnitsky Act, Mr. Browder, is hoping that individual unilateral legislation banning or blocking these individuals and their wealth would have the multilateral effect—as more and more pleasant places around the world close their doors—of targeting not the individuals in FACFOA, who are senior officials in government or high-level criminals, but the jailers and the policemen—as Mr. Browder said, the engineer who drove the train to Auschwitz. We are seeing more and more, particularly in Russia but also in other countries, these low-level criminals accumulating vast wealth and then seeking to move it to safe havens around the world.

[Dr. Meredith Lilly]

What is your question, Mr. Kent?

[Peter Kent, Conservative, Thornhill, ON]

If imposed by other democracies, it effectively becomes multilateral, even though it is designed as unilateral.

[Dr. Meredith Lilly]

Right. If Canada were to act through SEMA, either by broadening the provisions under SEMA or by passing an individual Magnitsky Act, the intention would be for Canada to act together with the United States, and I think the desire by Mr. Browder, which he's expressed in the past, is that includes the European Union, as well. I think that is his motivation, and I think he's spoken to this committee in the past. One of the very big differences between the United States, the European Union, and Canada, as has already been said, is our relative size. It's not a bad thing that Canada is not a prime destination for corrupt money around the world. That's a good thing. The ability of the United States and the European Union, particularly because the United Kingdom is a global financial centre, to have, potentially...and I don't know the extent to which assets and funds are located in these countries, but the idea is that potentially these countries would have more impact. Not knowing the state of Russian finances in Canada, but assuming it's not a primary destination for corrupt money, if Canada were to pass this, then I think it would largely be a symbolic measure.

[Peter Kent, Conservative, Thornhill, ON]

I ask this because of the evidence in the Vitaly Malkin case, where immigration, for example, blocked him consecutively at the border and refused him entry, and effectively his wealth, but it was overturned eventually on the argument before an immigration court on the definition of “entrepreneur”, despite credible evidence of his embezzlement of UN development funds, his criminality, and the millions that he did get into the country. He's been denied citizenship, but nonetheless he got in because of a dysfunction between various Canadian government departments. CSIS has a file and immigration has a file, but the Mounties don't seem to have a file because they have other priorities, they said.

[Dr. Meredith Lilly]

I have heard you speak about this man before, but I don't know anything about the individual case, beyond what's in the news.

[Peter Kent, Conservative, Thornhill, ON]

Okay.

I wonder if our other witnesses would care to comment.

[John Boscariol]

I would add that these targeted measures, which I think they've referred to as smart sanctions, are a step forward. They've been used more often recently. To the extent that we're able to avoid the broader measures, which are blunter sticks, when we impose financial services bans, or import or export bans, and instead are able to narrow this to individuals, provided the proper protections are in place, then I don't see concerns with this. I do see a very strong signal that's sent when Canada signs onto that, even if it is largely symbolic on the Canadian side.

These days there are more and more reports about allegations of wealth being moved to Canada by corrupt officials, largely in the Far East. We know Canada is struggling with that, and there's money laundering allegations there. I'm not sure Canada is as isolated from that as others may think. There is money moving into Canada that might be illegitimate, and these measures may be appropriate to target that. I would keep in mind, though, that because of its size, as Meredith mentioned earlier, the United States is the main player here. When someone is designated national or listed by the United States, then that has implications around the world. I'm not saying Canadian companies necessarily always follow that designation and refuse to do business with them, but that has a huge reputational impact. When they make a move like that, whether Canada does anything or not, that can still have a very large impact.

[Peter Kent, Conservative, Thornhill, ON]

Professor.

[Dr. Thomas Biersteker]

I have one observation that goes back to the point I made earlier about the different purposes of sanctions. In my opinion, all sanctions send a normative signal of one sort or another. That signal is not always very clearly articulated, and so there are often times when we find that the message is not adequately communicated simply by an administrative action or even the passage of a new resolution. One needs to have a combination of not only a signal being sent, but also a communications strategy with that signal. If you wish it to be effective in sending a signal, you need to do more than simply add someone to the list or take someone off the list. You need to combine this with a communications strategy that makes clear why the measure is being applied. Otherwise, the effectiveness of the signal is reduced. People might not notice the significance of how another country has added this person to their list. In fact, it needs to be part of a larger political communications strategy.

I can assure you, this is a serious problem within the European Union. When the RELEX group meets in Brussels on a weekly basis, adding two names or taking two names off the list, without any communications strategy, it's quite ineffective.

On the same theme, I was recently in Russia, talking with people about the sanctions. It's a perfect illustration of that failure. Although I think the sanctions being applied on Russia, at least from our analysis.... I think Canada was first, even ahead of the U.S. and Europe, in applying restrictive measures on Russian individuals over Ukraine. If the message isn't clearly communicated, it's not going to have an effect. A good example of the ineffectiveness of the signal at the moment is the fact that, apparently, most of the Russian public believes Russia's countermeasures against Europe on agricultural products are actually additional European measures against Russia. Here's an illustration of having the measures but not controlling the communications. Now, I'm not saying it's easy to control the communications in Russia today, but it's nonetheless a clear example of the disconnection between the normative, symbolic act and the communication of that act. It's something to think about if you want to use sanctions.

Later on I want to come back to the chair's query about costs on Bern, because there may be some guidelines from the European side.

[The Chair, Liberal, Bob Nault]

Thank you, Mr. Biersteker. Thank you, Mr. Kent.

I'm going to go now to Mr. Levitt.

[Michael Levitt, Liberal, York Centre, ON]

Thank you all for your presentations here today.

I want to stay on the previous topic from MP Kent and focus a little bit on Magnitsky, while broadening it. Before the Senate at the moment is the global Magnitsky act. It's something that Parliament addressed previously, and it is certainly something of concern to a number of the members of this committee, and that is broadening the scope and being able to hold gross human rights abusers to account outside of Canadian borders.

We've heard, Ms. Lilly, your feelings that it's not necessarily the way to go, and that it creates a whole set of other problems for Canada. If I were asking you to design for us a system that could be effective.... We know the goal. The goal is to have a voice on a number of levels, signalling and in actual terms, to hold gross human rights violators to account. If we consider this as a priority, what would be your recommendation about how to best achieve it, given that it's a complicated issue? Could you tell us how to go about doing that?

[Dr. Meredith Lilly]

I'll be clear: it's not that I'm saying not to proceed; I'm saying that if we choose to proceed, we should do so carefully, and I'm saying there are ways. When I say not to act unilaterally, I believe Canada shouldn't be acting alone. However, if we think of the example of Russia and the crisis in Ukraine, we used legislation that allowed Canada to act unilaterally, and to then act in concert with the U.S. and the European Union. They don't form a recognized group of states, those three groups. That's how we're able to use SEMA and its unilateral provisions to act in a concerted way. If the committee wants to proceed, then provided that it's with the idea of working together with other willing states, I think that's one thing Canada should do.

[Michael Levitt, Liberal, York Centre, ON]

Let me interject. Again, we are seeing other like-minded countries that hold human rights as a massive priority—like the U.S. right now with the bill before the Senate—actually putting into place these acts, so down the line, as we go about designing whatever it is we are going to do, we are seeing like-minded states that we can act in co-operation with—especially as countries are dropping out of the ICC at the moment, which is a great concern. Countries that need to be held to account the most are pulling back, causing the need for more unilateral actions or actions that aren't through traditional mechanisms in the international community.

[Dr. Meredith Lilly]

Certainly, it's recognized that in the United Nations, for instance, it is increasingly difficult to get a Security Council resolution for states to act in that forum multilaterally.

I would, though, recommend ways to ensure that multilateral action takes place, even if it is with a coalition of the willing. Right now, SEMA provides authority for Canada to act entirely unilaterally. It's just that, in practice, Canada hasn't done that. It's fairly broad in allowing Canada to act on its own if it wishes. That's one point.

The second point is that it would be important to anchor the provisions to some kind of threshold. I think the ones that are recommended by Mr. Bezan with respect to.... Not having spoken to him about the bill, I can picture using the text, as it is reflected, in the example of a well-known human rights activist being killed by extra-judicial processes in a country, and using legislation to call that country or the people involved to account. Anchoring it to the activities of the people whose human rights have been grossly violated would be one way to do it, or having some other kind of threshold that at least anchors why Canada is involved and why it sees the necessity to become involved.

Those are the two points I would make.

[Michael Levitt, Liberal, York Centre, ON]

Thank you.

Mr. Boscariol, may I ask you the same question? You can either continue or start your own. If we know what we want to build, how do we build the beast so that it's effective?

[John Boscariol]

As I've already said, I prefer using the smart and targeted sanctions. That's very much what we are talking about here. I know everyone has the best of intentions when it comes to gross human rights violators, and we want to make sure that we not only send that signal you were talking about earlier, but actually put into effect something that has real meaning and that is put into effect by our exporters, banks, and big financial institutions so that they are really participating in this and it's effective. As I said before, they are on the front lines of this.

I am not against broadening it to gross human rights violators, but my caution here, as we go forward in doing this, is that we have to fix the administration of this. I may sound like a broken record, but I'll give you a quick example. When names are put on the Canadian list, often it's just a name that's added to the list, and no other detail. We've had situations.... This happened with Burma sanctions in the last few months, where there was a name on it. We act for a company that was thinking of engaging in transactions with a company by that name in Burma. There were slight differences. We had a suspicion that it could be that entity, so we called up Global Affairs, but they could not give us any assurance as to whether that was the entity named or not. It's a crazy situation. If we can't get that guidance, if we can't properly identify who these parties are on these lists and enable companies and banks to identify them, it's not going to have any practical effect.

[Michael Levitt, Liberal, York Centre, ON]

I think that's something which all members of this committee.... Some of the deficiencies in the areas you're talking about came out loud and clear in some of the earlier testimony we heard from department and other officials. I think we've taken that on board.

Mr. Biersteker, do you want to give a short thought on the issue as I put it forward?

[Dr. Thomas Biersteker]

Certainly. I think the idea of holding gross human rights violators to account is important. It's important that Canada and other countries that are strongly committed to the support of human rights globally have the capacity to act in this way.

I also agree very much with Professor Lilly about the importance of acting multilaterally, because acting unilaterally, especially with a relatively smaller country, is not likely to be effective. I think the reason it's important at this point in time is that, somewhat depressingly, we've seen a weakening of international norms in the past five years and maybe closer to a decade. With regard to that, and not just because I study the UN, I think in all instances this action should be taken first and foremost within the UN system, because sanctions under those contexts are going to be not only accepted broadly as legal, but also as more legitimate than other actions that are being taken.

At the same time, and we have to be honest about it, the UN is currently blocked on these issues. This is the first year since we've seen annual updates on our work on UN sanctions that there have been no new sanctions in place. Russia has blocked virtually every sanctions proposal at the council in the past year.

It means that in certain cases, and Syria is a perfect example, countries would want the capacity to take on some kind of multilateral action, even though it's a second best option. The first best option would be to do another under UN auspices. If that doesn't work, then I think it's important to have a forum for expressing concerns about what's happening in Syria.

[Michael Levitt, Liberal, York Centre, ON]

Thank you.

As I had said before, I think it's the deterioration of some of the mechanisms to hold individuals and countries to account. With the UN and the ICC we're seeing challenges right now. We may see this as an emerging area where more like-minded countries are being able to coordinate with new legislation in this area of gross human rights violations.

[The Chair, Liberal, Bob Nault]

Thank you, Mr. Levitt.

Colleagues, we have 15 minutes left, and there are three members who have some questions. Let's try and stick to five minutes. We'll go to Mr. Kent next.